In a letter written to the Jamnagar district collector, Cairn India has informed about its decision to suspend the laying of pipeline from Salaya to Bhogat in Gujarat citing opposition from farmers in providing Right of Usage (ROUs).
"The project of national importance, which was in its last leg of completion, has now been suspended for the want of access of Right of Usage (ROU's)," a company spokesperson said.
"The Gujarat farmers are opposing the project, denying ROU access to lay pipeline for the last 74 km stretch from Salaya to Bhogat, of the 670 km pipeline project," he said.
The USD 1 billion, worlds largest heated insulated 670 km pipeline project, of which, 516 km has been completed, has begun delivering crude oil from Barmer to Salaya section to Indian Oil Corporation Ltd and few private refiners like RIL and Essar.
The pipeline projects passes from two districts of Rajasthan and six district of Gujarat like Banaskantha, Patan, Ahmedabad, Suredarnagar, Rajkot and Jamnagar, for transporting the desert crude at temperature as high as 65 degree Celsius.
"We have plans to construct an oil terminal at Bhogat, so that crude oil supply from Barmer can reach here, and then it could be shipped to refineries like MRPL and others on the sea coasts of India in order to help them reduce dependence on crude imports," a company spokesperson said.
Cairn India, one of largest oil and gas major currently produces 1,75,000 barrels of crude oil from its Rajasthan block, in a joint venture with ONGC.
The ONGC and Cairn JV has proposed to raise the production to 240,000 barrel oil per day production from the Mangala, Bhagyam and Aishwariya fields by FY:2013, after expected completion of this pipeline network project.